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Release Explanation: It measures the monetary value of all goods and services produced within a Country’s borders in a specific time period. GDP is calculated on an annual basis, is the broadest measure of activity, and the primary gauge of each economy’s overall health. “It includes all Company and Personal consumption, government outlays, investments, and exports less imports, that occur within a defined territory,” TheLFB-Forex.com Trade Team said.
TheLFB-Forex.Com Trade Desk Thoughts: The Euro-area GDP release showed that the economy contracted 2.5% in the first quarter. Q1 was the fourth consecutive quarter in which the economy contracted.
Compared with the first quarter of 2008, the Euro-area GDP fell by 4.8%, revised from the flash estimates. Taken individually, the biggest economies from the Euro-area declined at a record pace in the last quarter. The only two economies that did not contract in the first quarter compared with the previous one were Cyprus, which printed a 0.0% read, and Poland, which expanded 0.4%. As previous mentioned by TheLFB-Forex.com Trade Team, the biggest contraction was seen in Latvia, 11.2% from the previous quarter and a whopping 18.6% from the previous year.
During the first quarter of 2009, household final consumption expenditure declined by 0.5% following a -0.4% read in the previous quarter. Investments fell by 4.2% in the euro area after a similar decline in Q4. Exports decreased by 8.1% in the euro area, the most in the last 14 years. Imports dropped by 7.2% in the euro area, indicating a large decrease in consumption.
Forex Technical Reaction: The euro plunged 100 pips during the European session, as the S&P futures failed to break the 945.00 swing points. Against the pound, the euro lost 40 pips to reach the lowest value since December 2008.
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